Wine producers have predicted losses running into millions of rand over the next three years as the Western Cape drought takes its toll. According to Bernard van Tonder, KWV international sales executive, both tonnage per hectare and liquid extraction (juice per ton) have been negatively impacted at KWV by the worst drought experienced in the existence of the company.
“We are estimating an impact of R50.7 million over the next three years,” he told FTW. “Grape farmers have historically been under pressure. Low returns due to over-production have continuously driven prices down - putting real pressure on farmers to make money. If there is anything good to come out of this drought we are experiencing now it is that we are not going to see a lot of bulk wine and excessive wine available in the market.” He said the estimated impact of the drought for 2018 was around R7.8 million.
“Fewer tons are being crushed – only 10 000 tons versus 12 000 tons – and less juice extracted per ton of grapes from the 2016 and 2017 harvests.” In 2019 the impact is set to increase to an estimated R22.4 million because only 10 800 tons of grapes will be crushed compared to 12 000, less juice will be extracted, and a 25% price increase on wines is predicted.
“We have to increase prices. There is a lot of resistance from industry at present, but we have to do it looking at the impact of this drought,” he said. In 2020 the drought impact is estimated to be around R20.5 million. “There will be a 25% increase in wines procured from the 2019 harvest and a 9% increase in grapes procured from the 2018 harvest. This will all have an impact on the cost.”
